Wealth’s Impact on Child Outcomes: Evidence from Sweden

Drawing on a large sample from Sweden, a new working paper suggests that wealth may not have much impact on child outcomes. From the abstract:

In adults, we find no evidence that wealth impacts mortality or health care utilization, with the possible exception of a small reduction in the consumption of mental health drugs…In our intergenerational analyses, we find that wealth increases children’s health care utilization in the years following the lottery and may also reduce obesity risk. The effects on most other child outcomes, which include drug consumption, scholastic performance, and skills, can usually be bounded to a tight interval around zero. Overall, our findings suggest that correlations observed in affluent, developed countries between (i) wealth and health or (ii) parental income and children’s outcomes do not reflect a causal effect of wealth.

These findings should give us pause. Perhaps we as citizens and policy makers should be looking at other factors that truly impact the long-term well-being of children.